Stiller Sells Shares Short of SBUX Surprise

This September, several of the main patents on K-Cup technology will expire. Green Mountain holds those patents; this is part of how they raked an astonishing 2.7 billion dollars in revenue in 2011. In February, Green Mountain founder Bob Stiller sold off 66.3 million dollars worth of stock shortly before GMCR shares plunged following a Starbucks K-Cup Machine announcement.

Robert P. Stiller, founder and chairman of Green Mountain Coffee Roasters Inc. (GMCR), sold $66.3 million of his stock before it plunged the most in four months on news that Starbucks Corp. (SBUX) had developed a rival to its K-Cup brewer. Stiller’s combined sales on Feb. 15 and 24 were his largest in a single month since at least 2003, when the stock traded below $2, data compiled by Bloomberg show. He would have earned $13.7 million less had he sold on March 9, when the shares fell 16 percent after Starbucks unveiled its machine for home-brewing single cups of espresso and coffee.

In a March 9 regulatory filing, Green Mountain acknowledged having “recently learned of Starbucks’s planned initiative in the espresso-based single-cup category.” Starbucks had an existing agreement to sell coffee for Green Mountain’s K-Cup system. Spokesmen for Green Mountain wouldn’t specify what information it received about the plan and when. “It’s something that the SEC would want to look at,” says James Cox, a securities law professor at Duke University.

All allegations of wrong-doing on the part of Mr. Stiller are exactly that at this point – allegations – but as the smart-heads at Bloomberg seem to indicate, ain’t none of this looks good.